The Balance Billing Landscape

January 21, 2020

What is balance billing?

You may have heard the term on the news recently.  Balance billing is getting national attention because of the large, out-of-pocket expenses some consumers are getting – mainly from hospitals and air medical providers.

  • Balance billing is the practice of seeking collections from a patient for balances left above and beyond copayments and deductibles after an insurance carrier pays its portion of the bill.
  • Balance billing happens when a provider is not in network (doesn’t participate) with the insurance provider and the two parties have not mutually agreed on a reimbursement amount.
  • Balance billing is regulated by a mixture of federal and state laws that provide differing degrees of regulation relative to billing patients for outstanding balances.

At the federal level, Medicare does not allow providers to bill patients above and beyond a patient’s copayment and deductible obligations.

As an example, a Healthcare provider submits a claim charging $500.00 for a service provided. Medicare only allows a reimbursement of $320 for the specific service, which also includes the patient copay determined by the carrier. If we subtract the $320 allowed amount from the total original charge of $500, the remaining balance is $180. Under Medicare regulations, the provider cannot bill the patient for the $180 balance, as it is above the Medicare reimbursement. If the $180 was billed to the patient, this would be considered balance billing.

In addition to federal regulations, some states also have regulations regarding balance billing.  As an example, a provider does not participate with a commercial insurance payer and submits a $500 claim for the service provided. The insurer pays $150 (what the insurer has deemed “reasonable”) and there is a $350 patient balance.  Some states allow a provider to seek collection of this balance and some states prohibit the collection of this balance.

How confused are you now that we reviewed the examples of balancing billing above? If you are still asking what balance billing is, you are not alone. Let’s look at how balance billing can impact an organization and how an RCM organization can assist their clients through the process to align with their state specific regulations.

What can you do?

In addition to knowing federal regulations, clients of Integra Connect have a solid understanding of state regulations which are imperative in the navigation of the balance billing landscape.  States may have options for providers to appeal or fight against reimbursement amounts that are not sustainable for providers.  Understanding these options and understanding the other tools that are available to providers help clients make informed decisions and cases for the services they’ve worked so hard to provide.

Here are some links that may be helpful:

The Fair Health website provides reimbursement data by geographic region and type of service.  This website can be a valuable tool in researching the reimbursement you receive from an insurer compared to average reimbursement rates for the area you serve.

The link below from the Commonwealth Fund gives a great overview of state regulations relative to balance billing as well as a “clickable” map.

The staff at Integra Connect are extremely well versed in both federal and state requirements related to balance billing.  We provide billing services for nearly all fifty states and know how to navigate the many different landscapes across the country.

We can help you with this navigation and be a partner and advocate for you.  Don’t hesitate to contact us to see how we can help you with ensuring you are following the guidelines in your state and what options you have as a provider.